Alabama officials and lawmakers eye changes to film program to tone down state funded 'star power'

It would protect us from a bigger film coming in and taking up all the incentive money getting Tom Cruise

MOBILE, Alabama -- Proof of Alabama's burgeoning movie industry can be found in the west end of Mobile at Mudbrick Media Studios.

Tucked inside leafy Bruns Drive, the 40,000-square-foot production studio features a two-story sound stage and green screen room, an editing room, a space for wardrobe and prop design, and all the technical gadgets needed to make a movie.

A quick tour of the studio offers a glimpse into the film economy that has blossomed in the Heart of Dixie in the wake of a law passed five years ago -- The Entertainment Industry Incentive Act -- meant to bolster the business.

Banking in part on the incentives, Mudbrick Media has shot six feature-length films since it opened in 2008. Five of the films cost more than $21 million to produce in total and Alabama has reimbursed the company for about $5.5 million since 2009.

So far, the state has spent about $22.4 million to bolster the state's film industry, numbers released by the Alabama Film Office show.

Drew Hall, who produced and directed all of Mudbrick's films, says the money is essential to court film investors.

Drew Hall

"To me, it helps mitigate some of the risk," Hall said. "If you know you are incentivized, you are cutting down on your risk. You need something to cover your back."

But not everyone is on board.

State Sen. Del Marsh, R-Anniston, introduced a bill in March to suspend the incentives for two years. It never went for a vote.

"At the end of the day, if this industry can't show it's bringing revenue to the state that exceeds what incentives are, I'm not going to be happy," Marsh told AL.com. "I hope it's a successful industry in the state. The only way we can prove that is to get accurate data from these companies and evaluate."

Addy is revising his study. He said it is several months away from completion.

Hall says his livelihood depends on the incentives. But he suggested the program could be improved if state officials capped "above the line" expenses. These include the salaries of movie stars, who can make big money to fly into Alabama for one day of shooting and see a quarter of their pay reimbursed by the state.

Putting a ceiling on these expenses would preserve incentive money for smaller local films that employ more Alabamians, Hall said.

"It would protect us from a bigger film coming in and taking up all the incentive money getting Tom Cruise," Hall said. "By keeping it below the line, it keeps it nested a little bit better in the economy here."

Greg Canfield, Alabama Commerce Department director, agreed that the program's controls could be tightened. The Alabama Film Office, which falls under his department's control, needs to tweak its rules to fix unintended consequences of the 2009 law, he said. Namely, the state is reimbursing production companies to pay for expensive "star power" to come to Alabama.

"They've got it available to them so they will take advantage of the opportunity to bring their film to the state," Canfield said. "The question is whether it's profitable to the state."

Canfield said his office's attorney is reviewing incentive programs offered by other states in search of solutions. It may require the Alabama Legislature to change or amend the law.

The Alabama Film Office has already enacted one change. Starting earlier this year, films are also now required to start production within 30 days of getting preliminary approval from the state. Films that began shooting months later were previously given preliminary approval for the incentives.

Greg Canfield

"We want to encourage films that are actually going to be made and produced and distributed," Canfield said, adding that the change frees up money for ready-to-go projects.

The Alabama Film Office denied an AL.com records request for several of the films' production budgets, applications and expenditure audits, citing a confidentiality law.

Booming business

The film industry has given a bump to the economy, generating 3,238 jobs, nearly $159.6 million in wages, and 886 production-related jobs for the 2012-2013 year, according to the Motion Picture Association of America.

"We think we are bringing quite an economic impact to the city and to the county and to the area," said Mobile Film Office director Eva Golson.

Thirty-two films have received incentives in the past five years. Fifteen of them were filmed last year. The number of films coincides with the rising number of offered financial incentives, which have quadrupled since the law was passed.

Five million dollars in film incentives were allocated in 2009; $15 million in film incentives was allocated for the 2014 fiscal year, ending in September; and, $20 million will be set aside annually starting next year. The incentives are taken out of the film companies' income taxes, which would otherwise benefit Alabama's Education Trust Fund.

The incentives have funded a variety of projects. Films featuring Hollywood stars John Cusack, Bruce Willis, Nicholas Cage, and rap mogul 50 Cent have cashed in on the program. It was used to shoot the Jackie Robinson biopic "42," at Rickwood Field in Birmingham and "Selma," the Oprah Winfrey-produced civil rights movie, in Selma and Montgomery.

Four seasons of County Music Television's reality show "Sweet Home Alabama," was financed with the money. Alabama Power and the Hangout Festival have also benefited from the state law, receiving $139,000 and $2.2 million respectively in tax incentives for their film projects.

All state-certified expenditures for all qualifying films are entitled to a 25 percent rebate, according to state law. Thirty-five percent of all payroll paid to Alabama residents for state-certified production are also eligible for reimbursement under the law. Production companies must produce an audit of their expenditures to the state before receiving the money.

Qualifying production expenditures for a project must equal or exceed $500,000, but not exceed $20 million.

Spent correctly, Hall, the Mobile director, says his crews circulate the money into the local Alabama economy. When he shot the comedy "Nigel and Oscar vs. the Sasquatch," Mudbrick Media took a crew of about 45 to 50 people to Mount Cheaha in north Alabama. They lived in cabins while they shot the film and went out to Birmingham to party at night.

"What happened?" Hall said. "People went to Birmingham and these people like to drink like fish."

Hall said production companies line up investors, scripts, and all the necessary ingredients to put a film together ahead of each year in a race to capture the state money.

"There are movies lined up to be executed," Hall said.

This post was updated at 1:03 a.m. Aug. 14 2014 to include accurate wage totals from the Motion Picture Association of America.